Cotton imports increase drastically by 46% as local production falls

During nine months of the current fiscal year, Pakistan imported cotton worth $1,838 billion. This is 46 percent over the $1,258 billion bills for imports of cotton for the same time last year.

The lint imports in Pakistan amounted to $1,704 billion between July 2020 and March 2021, which is greater than $1,65 billion in the overall cotton importer bill for the same FY19 period.

In 2012, cotton production at the local level declined to 5,6 million bales in 2021 from more than 14 million bales. This also affected exports from this sector, with the rise of $212 million in 9 months to $10,411 trillion, compared to $10,269 billion for exports reported in the same period of FY2020, which was just $212 million.

Efforts to increase cotton production have been underway in the region. Members of the Chambers of Commerce and Industry Federation of Pakistan (FPCCI) met with the Regulatory team at Monsanto and Bayer Crop Science to obtain the latest technology of seed production. It is claimed that the technology in question has helped Indian farmers increase cotton production from 10 million bales to 40 million bales.

Pakistan's yield per acre is less than a fourth of the output of Indian cotton. The CPEC Authority, Chairman Asim Bajwa, also spoke recently about this issue and declared that Pakistan, with China's support, is working on producing cotton in Balochistan.

He said the Chinese want to produce cotton in abandoned lands. The government's target for the current season is 10.5 million bales. Sources familiar with the industry claim however that only approximately 8 million bale yield can be expected if there are no pesticides or premature rainfall, such as pandemic and inappropriate weather conditions at savory crops last year.

By 30 June 2021 the Federal Revenue Board (FBR) has exempted duty on imports of three different kinds of cotton yarn.

In order to enhance value-added exporters, the Economic Coordination Committee (ECC) withdrew the import customs duties on cotton yarn. By December 2020, the regulatory duty on the advice of the ministry of business has already been withdrawn. Now, producers and exporters of value-added cotton will import threads at zero percent duty.